Introduction
Have you been impacted by untimely payments from the public sector? It may be time to brush up on the public sector legal requirements surrounding this issue.
Timely payment for goods and services is crucial in maintaining a healthy and sustainable business environment. Conversely, consistent late payments can seriously impact cash flow, business growth, and resource allocation. Understanding the legal requirements and responsibilities around invoice payments is vital for suppliers dealing with public sector organisations. Not only will it help you to prevent future late payments, but it will also help you understand your rights.
In this article, we explore the obligations of public sector organisations in the UK when it comes to paying invoices on time..
Public Sector Payment Regulations: A Brief Overview
The primary legislation governing payments in the public sector is the Public Contract Regulations 2015. Transposed from EU directives into UK law, these regulations stipulate that public bodies must pay valid and undisputed invoices within 30 days of receipt.
We recommend visiting our Public Contract Regulations 2015 page to understand the full details of these regulations. You may also want to browse our article on Regulation 113 of this law.
The Late Payment of Commercial Debts (Interest) Act 1998
Another critical piece of legislation is the Late Payment of Commercial Debts (Interest) Act 1998. This law allows businesses to claim interest and compensation if another organisation, including public sector organisations and contracting authorities, pays invoices late.
For further information on this act, visit our Late Payment of Commercial Debts (Interest) Act 1998 page.
Responsibilities of Public Sector Organisations
Public sector organisations are legally obligated to pay their suppliers within the stipulated time frame. Provided, of course, that the invoice is correct and undisputed. Failure to do so can result in suppliers claiming late payment interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998.
Additionally, public sector organisations must ensure their payment systems are efficient and transparent, allowing suppliers to track the status of their invoices. They must also promptly address any disputes regarding the validity or amount of an invoice.
Implications of Non-Compliance
Non-compliance with these obligations can have serious implications for public sector organisations. Apart from financial penalties, persistent late payment can harm an organisation’s reputation, leading to a loss of confidence among suppliers and potential difficulties in securing future contracts.
How to Make a Late Payment Claim Against the Public Sector
If you have received late payment from the public sector, you could be eligible to claim compensation. At latepayment.com, we help businesses navigate the claim process and get the money they deserve.
Our team of specialists take the reins, handling each step of the process so you can focus on your daily operations. We’ll use our years of expertise to maximise your chances of making a successful claim. Plus, our services work on a no-win, no-fee basis.
The first step is to check our Eligibility Calculator to see if you are entitled to compensation.
Then, get an estimate of what you could claim back using our Claim Calculator.
Our simple and transparent claims process allows your business to get the compensation you deserve without the hassle of navigating complex legislation.
For more information, browse our comprehensive FAQ page. If you don’t find the answers you’re looking for, get in touch with our team of experts.
Staying updated with the latest developments and insights can protect your business from late payments, so keep an eye on our Articles section.
Next Steps
Adherence to the legal requirements and responsibilities around invoice payments is not just a matter of law—it also plays a significant role in maintaining healthy business relationships between public sector organisations and their suppliers. Therefore, it’s in the best interest of these organisations to ensure they meet their payment obligations promptly and efficiently.
As a supplier, you must know your rights and the public sector legal requirements under these regulations. If you’re dealing with late payments from a public sector organisation, you can make a late payment claim to recover the interest and compensation you’re entitled to.
Visit our Eligibility Checker to see if you’re eligible to make a claim.
